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The European
Parliament adopted a resolution based on the own-initiative report drafted by
Benoît HAMON (PES, FR) welcoming the strategic review of under way at
the IMF and supported a re-orientation of IMF policies towards emphasising
its core mandate of stabilising global exchange rate fluctuations and as a
lender of last resort for countries experiencing serious balance of payment
problems. Parliament
stated also that the allocation of capital and of voting rights has lagged
behind other developments over the years. It called, therefore, on the IMF,
in the interest of its own legitimacy, to consider means of distributing the
quotas and voting rights within its governing institutions in such a way as
to enable more appropriate weightings to be given to the developing and
emerging economies. The main factors preventing the developing countries from
having a voice in the IMF commensurate with the share of the world population
they represent are the lack of votes on the Board of Governors (African
countries, accounting for 25 % of the membership, have just over 4 %
of the vote) and the lack of qualified human resources, and institutional
capacity to participate in decisions. In addition, European positions in the
EU representation within the IMF must be better coordinated. Member Statesshould work towards a single voting constituency - possibly starting as a
euro constituency, with a view, in the longer term, to securing consistent
European representation, subject to the European Parliament's scrutiny. Parliament
went on to emphasise the importance of macro-economic stability, and stated
that this is an essential condition for the proper development of structural
policies. There must be improved coordination between the various
institutions responsible for designing such policies. Due to the progressive
opening-up of capital markets and the liberalisation of movement of capital,
it is difficult to avoid the occurrence of financial crises. The IMF's
adjustment policies have sometimes failed to prevent crises from becoming
infectious and recurring. Parliament regretted in this connection any failed
efforts to promote economically-sound policies that prevent crises. It
recalled that inflation was not the only economic problem in developing
countries and that IMF policies should be geared towards the objectives of
macro-economic stability and sustainable growth. It noted that to go down the
path of sustainable growth, the existence of guaranteed macro-economic
policies is essential. To that end, Parliament affirmed that macro-economic
stability is not incompatible with the fair distribution of growth. Parliament
underlined the need for the IMF to conduct systematic monitoring of all
member countries. It can only do this and give advice on desirable actions to
prevent the occurrence of financial crises if member countries disclose their
complete statistics concerning, for instance, monetary reserves and volume of
money in circulation, on a regular basis. Partner-country
ownership must be at the centre of development cooperation, and Parliament
called on the IMF to recognise, when considering conditions for
lending, the priority to be given to poverty eradication and not to
make the achievement of the MDGs more difficult. Developing countries should
not have to open up their markets fully and without restrictions to foreign
imports. They should be able to establish protection for certain industries
for a limited period so as to permit a steady development. Remaining
conditionalities must not pressure low income countries into unilateral
opening of markets outside the framework of WTO negotiations or impede their
capacities to negotiate, in the framework of WTO negotiations, of their own
volition and on their own terms the degree of market opening to which they
are ready to commit. Parliament also called on the IMF to ensure an adequate
degree of flexibility in implementing trade-related conditionalities so as to
enable beneficiary countries to determine their own degree of market opening.
It felt, however, that eventually full integration into the world market
offers considerable growth opportunities for developing, newly industrialised
and industrialised countries. Parliament
moved on to state that the IMF must increase transparency and build an
institutional structure conducive to its mission. It regretted that NGOs and
national parliaments are insufficiently involved in the definition of
conditionality. There were calls for better coordination between the policies
of the IMF, the World Bank, the WTO, the ECB, and the EU, in particular as
regards the instruments linking the various markets. These include the
Integrated Framework, the Trade Integration Mechanism, the Poverty Reduction
and Growth Facility (PRGF) and the Policy Support Instrument (PSI). In the
context of the MDG’s, Parliament drew attention to the ambivalence in the
position of the IMF which, although it is responsible for only one very
specific aspect of public action, plays a leading role in implementing the
strategies pursued by all players. Parliament
welcomed the IMF's emphasis on improving the levels of education and health
in developing countries and welcomed the decision taken by the IMF and the
World Bank to extend the experiment of the HIPC (Heavily Indebted Poor
Countries) Initiative.
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